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AP Microeconomics

Subjects : economics, ap
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Two goods are consumer substitutes if they provide essentially the same utility to consumers






2. The total quantity - or total output of a good produced at each quantity of labor employed






3. Additional benefits to society not captured by the market demand curve from the production of a good - result in a price that is too high and a market quantity that is too low. Resources are underallocated to the production of this good






4. The imbalance between limited productive resources and unlimited human wants






5. The case where economies of scale are so extensive that it is less costly for one firm to supply the entire range of demand






6. The more of a good that is produced - the greater the opportunity cost of producing the next unit of that good






7. Ed = 1






8. Models where firms agree to mutually improve their situation






9. Costs that do not vary with changes in short-run output. They must be paid even when output is zero.






10. A firm that has market power in the factor market (a wage-setter)






11. Entry of new firms shifts the cost curves for all firms upward






12. Entry (or exit) of firms does not shift the cost curves of firms in the industry






13. In the case of a public good - some members of the community know that they can consume the public good while others provide for it. This results in a lack of private funding and forces the government to provide it






14. Production inputs that the firm can adjust in the short run to meet changes in demand for their output. Often this is labor and/or raw materials






15. Product demand - productivity - prices of other resources - and complementary resources






16. The additional benefit received from the consumption of the next unit of a good or service






17. When firms focus their resources on production of goods for which they have comparative advantage






18. A period of time long enough to alter the plant size. New firms can enter the industry and existing firms can liquidate and exit






19. ATC = TC/Q = AFC + AVC






20. Total product divided by labor employed. APL = TPL/L






21. Direct - purchased - out-of-pocket costs paid to resource suppliers provided by the entrepreneur






22. Entry of new firms shifts the cost curves for all firms downward






23. Indirect - non-purchased - or opportunity costs of resources provided by the entrepreneur






24. The number of units of any other good Y that must be sacrificed to acquire good X. Only relative prices matter






25. The difference between total revenue and total explicit and implicit costs






26. For one good - constrained by prices and income - a consumer stops consuming a good when the price paid for the next unit is equal to the marginal benefit received






27. A legal maximum price above which the product cannot be sold. If a floor is installed at some level above the equilibrium price - it creates a permanent shortage






28. The difference between the price received and the marginal cost of producing the good. It is the area above the supply curve and under the price






29. Demand for a resource like labor is derived from the demand for the goods produced by the resource






30. AVC = TVC/Q






31. Consumer income - prices of substitute and complementary goods - consumer tastes and preferences - consumer speculation - and number of buyers in the market all influence demand






32. Additional costs to society not captured by the market supply curve from the production of a good - result in a price that is too low and a market quantity that is too high. Resources are overallocated to the production of this good






33. Substitutes - cost as percentage of income - and time to adjust to price changes all influence price elasticity






34. The change in quantity demanded that results from a change in the consumer's purchasing power (or real income)






35. MUx / Px = MUy/Py or MUx/MUy = Px/Py






36. Costs of inputs - technology and productivity - taxes/subsidies - producer speculation - price of other goods that could be produced - and number of sellers all influence supply






37. A good for which higher income decreases demand






38. The rate paid on the last dollar earned. This is found by taking the ratio of the change in taxes divided by the change in income






39. The most desirable alternative given up as the result of a decision






40. Ei = (%dQd good X)/(%d Income)






41. Occurs when there is no more incentive for firms to enter or exit. P=MR=MC=ATC and profit = 0






42. The output where ATC is minimized and economic profit is zero






43. An economic system based upon the fundamentals of private property - freedom - self-interest - and prices






44. Holding all else equal - when the price of a good rises - consumers decrease their quantity demanded for that good






45. Factors of production - 4 categories: labor - physical capital - land/natural resources - and entrepreneurial ability






46. A period of time too short to change the size of the plant - but many other - more variable resources can be changed to meet demand






47. The difference between your willingness to pay and the price you actually pay. It is the area below the demand curve and above the price






48. A very diverse market structure characterized by a small number of interdependent large firms - producing a standardized or differentiated product in a market with a barrier to entry






49. The lost net benefit to society caused by a movement away from the competitive market equilibrium






50. Ed > 1 - meaning consumers are price sensitive






Can you answer 50 questions in 15 minutes?



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